July 8, 2015 NASDAQ: LGND

Transcription

1 Cantor Fitzgerald Healthcare Conference July 8, 2015 NASDAQ: LGND

2 Safe Harbor Statement The following presentation contains forward-looking statements regarding Ligand s prospects, plans and strategies, drug development programs and collaborations. Forward-looking statements include financial projections, expectations regarding our and our partners research and development programs, and other statements including words such as will, should, could, plan, etc. Actual events or results may differ from Ligand s expectations. For example, drug development program benefits may not be realized and there can be no assurance that Ligand will achieve its guidance in 2015 or thereafter or that third party research summarized herein is correct or complete. The forward-looking statements made in the presentation are subject to several risk factors, including, statements regarding intent, belief, or current expectations of Ligand regarding its internal and partnered programs, including Promacta, Kyprolis, and Duavee and related projected market sizes, Ligand s reliance on collaborative partners for milestone and royalty payments, royalty and other revenue projections based on third party research, regulatory hurdles facing Ligand's and partners product candidates, uncertainty regarding Ligand's and partners product development costs, the possibility that Ligand's and partners drug candidates might not be proved to be safe and efficacious and commercial performance of Ligand's and/or its partners products, risks related to Ligand s internal controls, its compliance with regulations, accounting principles and public disclosure, and other risks and uncertainties described in its public filings with the Securities and Exchange Commission, available at Additional risks may apply to forward-looking statements made in this presentation. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect our good faith beliefs (or those of the indicated third parties) and speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and Ligand undertakes no obligation to revise or update this presentation to reflect events or circumstances or update third party research numbers after the date hereof. This caution is made under the safe harbor provisions of Section 21E of the Securities Exchange Act of Our trademarks, trade names and service marks referenced herein include Ligand and Captisol. Each other trademark, trade name or service mark appearing in this presentation belongs to its owner. The process for reconciliation between non-gaap financial numbers presented on slide 12, and the corresponding GAAP figures is explained in the footnotes on that slide and a full reconciliation can be found in our earnings press release dated, May 11,

3 Ligand: 2015 and Beyond Ligand is a high-growth company with economic rights to some of the world s most important medicines Largest portfolio in company history and projected to continue to drive the business significantly Cutting-edge innovations with Captisol and LTP technology are making major drugs possible Well positioned for strong revenue and profitability growth 3

4 Ligand Fast Facts Portfolio Size Blockbusters Catalysts Outlook Over 120 fully-funded programs Currently 2: Promacta and Kyprolis 6 major programs highlighted Over 20 revenue-generating products expected by 2020 Financials Revenue Cash Flow Repurchase > 30% annualized growth projected High due to low costs and low taxes 1.25 mil shares (6%) during 2H

5 2015 Events are Transforming Ligand Date Program Event January Delafloxacin Phase 3 study - Positive interim results January Sparsentan Orphan drug designation - Focal Segmental Glomerulosclerosis January Kyprolis US and EU submissions - Relapsed Multiple Myeloma February Lasofoxifene Sermonix licensing agreement February Promacta EU submission - Pediatric ITP March Kyprolis Phase 3 ENDEAVOR study - Positive results March Promacta Promacta acquisition closed (GSK to Novartis) March Kyprolis Priority FDA review - Relapsed Multiple Myeloma April SAGE-547 Phase 1/2 completion; Phase 3 trial initiated April IRAK-4 Positive preclinical data presented May Multiple Selexis 15+ program portfolio acquisition June LGD-6972 Positive Phase 1b results June Kyprolis Phase 3 ARROW study initiation for once-weekly dosing June Promacta snda approval - Pediatric ITP 5

6 Fully-Funded Programs ( Shots-on-Goal ) Commercial Products Generating Revenue for Ligand Ligand s Portfolio Continues to Grow Ligand s Achievement: Portfolio Expansion Partners Achievement: Products Generating Revenue for LGND Excellent record as drug researcher, innovator and licensor Our partners are doing their job getting new products to the market

7 Diverse Capital Allocation Building Asset Base and Increasing Returns for Investors Over last several years, Ligand has deployed capital in the following ways Company acquisitions Royalty acquisitions Share buybacks Investment in a private company that completed its IPO Invested in development of new technology platforms Ligand takes advantage of market knowledge and experience gained from our partnerships to find opportunities to invest and create value from the biopharma industry We will continue to explore opportunities that our programs and the markets present us 7

8 Technology and Novel R&D Drive Deal Making Our Platform Technologies Solving solubility and stability challenges LTP Technology Designed to selectively deliver broad range of pharmaceutical agents to the liver Our Novel R&D Potential Launch Glucagon Receptor Antagonist Program for Diabetes Entering Phase 2 Positive Phase 1b data showing robust effects throughout multiple ascending dosing Oral GCSF Preclinical Leveraging our technology and heritage in small molecule discovery 8

9 20 Products by 2020 Significant Expansion of Revenue Generating Assets Projected Ligand s Revenue Generating Assets > 20 Over 20 commercial programs projected to be generating revenue for Ligand by the end of this decade 1 7 Programs expected to come from existing portfolio; no new deals required to drive that expansion Projected

10 Diverse Portfolio Among Drug Companies Select Big Pharma Select Generic Big Pharma 29% Generic 18% Select Biotech Biotech 44% Spec Pharma 10% Select Spec Pharma Over 70 Partners 10

11 Fully-funded Partnerships Driving Growth We estimate our partners will spend over $1.1 billion in 2015 on R&D to advance our programs More partnered programs and late-stage trials are pushing spending up over 30% higher than Phase 3 trials 14 preclinical programs 38 Phase 2 trials Manufacturing scale-up 58 Phase 1 trials Regulatory filing fees 2 Phase 4 trials 11

12 Financial Overview Continued strong financial performance Accelerating projected revenue, earnings and cash flow growth Business model provides tremendous earnings leverage Growing total revenues: 33% compound annual growth projected Robust margins: 2014 gross margins ~86%, adjusted cash flow margins ~50% Strong earnings growth: 2017 adjusted EPS projected to be >$4.45 compared to $1.52 in 2014 Significant estate of tax assets: Over half a billion dollars in NOLs, projected cash tax rate to be below 5% for next several years 12 Adjusted EPS excludes non-cash expenses such as SBC, CVRs and convertible debt expense

13 Commercial Product Highlights

14 Promacta : Blockbuster Commercial Potential Oral medicine that boosts platelets. Ligand owed royalties Long patent protection, Orange Book patent expiration in 2027 Blockbuster commercial potential (>$1 billion) due to growing and large list of potential therapeutic indications Ongoing Development Currently Approved Indications New Markets ITP HCV AA ORT Idiopathic Thrombocytopenia 95 Countries Recent approval for Pediatric ITP Thrombocytopenia Induced by Hepatitis C 53 Countries Global filing and launch investment Aplastic Anemia 3 Countries Filed in the EU Oncology Related Thrombocytopenia Major clinical investment ongoing: MDS, AML, CLL, CIT, others 14

15 GSK and Novartis: Business Unit Profiles 1 Novartis has a superior oncology business, ~6 times larger than GSK s; Promacta transitioned to Novartis on March 1 st 2014 Oncology Revenue ($B) $11.7 Oncology Employees 8,000 Countries with Presence $2.0 1,300 GSK Novartis GSK Novartis GSK Novartis 15 Reference: GSK and Novartis company disclosures; GSK.com, Novartis.com

16 Kyprolis Leading 3 rd -line treatment for multiple myeloma (MM) in the US Viewed as best-in-class proteosome inhibitor Amgen has submitted US and EU applications for 2 nd line treatment in relapsed MM Granted priority FDA review; July 26, 2015 PDUFA date Also granted EU Accelerated Assessment Major investment by Amgen focused on further expansion of the label First-Line MM: Phase 3 (CLARION) Once-Weekly Dosing: Phase 3 (ARROW) Small-cell Lung Cancer: Phase 2 Dr. Meletios A. Dimopoulos University of Athens ENDEAVOR Data The combination of carfilzomib and dexamethasone was superior to bortezomib and dexamethasone regardless of age or prior bortezomib exposure and represents a new standard of care. Royalty rates of 1.5% to 3.0% 16

17 Kyprolis Recent data and events have continued to demonstrate the significant potential of Kyprolis APSIRE Phase 3 trial demonstrated an unprecedented 26.3 months of progression free survival (PFS) in relapsed MM ENDEAVOR Phase 3 trial demonstrated a DOUBLING of median PFS over Velcade (18.7 vs. 9.4 months) in relapsed MM 2014 worldwide Velcade sales were $3.1 billion Significant unmet needs remain in MM, and the market is expected to double to over $13 billion by Reference: AMGN March 2, 2015 corporate presentation

18 $ millions Kyprolis Growth Trends $3,000 $2,500 $2,000 $1,500 $1,000 $500 Low Analyst Estimate High Analyst Estimate Consensus 16 Amgen analysts provide projections for Kyprolis Consensus estimates project sales to increase ~5x by 2020 Kyprolis has shown superior efficacy over Velcade, the leading competitor which sold $3.1 billion in 2014 On higher revenues, Ligand receives higher royalties $ Reference: Amgen ENDEAVOR results press release, dated March 1, 2015

19 DUAVEE 14,000 US Monthly Prescriptions 12,000 10,000 Product for post-menopausal hot flashes and osteoporosis 8,000 6,000 4,000 2,000 DTC Campaign Initiated Significant US prescription growth trend Potential EU launch in 2015 Ligand is owed tiered royalties from 0.5%-2.5% 0 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Reference: Bloomberg/Symphony Health

20 Ligand Nexterone Revenue (USD, thousands) Nexterone : Royalty Revenue $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 Captisol-enabled product for treatment of ventricular fibrillation Shown consistent significant growth over recent quarters Baxter is dedicated to the brand and is pursuing expansion $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Reference: Q2 15 based on Baxter Q1 15 royalty report to Ligand

21 The Big Six

22 The Big Six: Major Pipeline Assets Certain portfolio assets stand above others, having the potential to add significantly to Ligand s top and bottom line They do so as a result of a mixture of factors, including: Market size or therapy area addressed Upcoming potential milestone events Royalty rate or specifics of deal economics Major news catalysts expected over the next 6 to 24 months More potential programs could move into the Big Six 22

23 The Big Six: Major Pipeline Assets Partner Program (Therapy Area) Stage Royalty Rate Potential Launch Potential or Actual 2015 Events EVOMELA (Oncology) Delafloxacin IV (Infection) SAGE-547 (Neurology) Sparsentan (FSGS - Kidney Disease) MK-8931 (Alzheimer s Disease) IRAK-4 (Oncology) NDA 20% 2015 Pending Approval Phase 3 Undisclosed 2016 Phase 3 Undisclosed 2017 Phase 2 9% 2017 Phase 3 Data Reported Phase 3 Trial Initiated Enrollment Completion by YE Phase 3 Undisclosed 2018 Updates Preclinical % 2019 Clinical Start by YE 23

24 LGD-6972: Glucagon Receptor Antagonist (GRA)

25 LGD-6972: Program Overview Ligand is developing LGD-6972, a glucagon receptor antagonist (GRA) GRA is a novel approach for the treatment of diabetes Many traditional therapies target insulin, a pancreatic hormone which reduces blood glucose Administration of insulin increases glucose storage in the liver and glucose utilization in tissues and therefore reduces blood glucose LGD-6972 blocks the action of glucagon, a pancreatic hormone which increases blood glucose Blocking the glucagon receptor decreases the liver s ability to release glucose, and therefore reduces blood glucose 25 Note: Phase 2 trial expected to begin in 2016

26 LGD-6972: Positive Phase 1b Results Multiple ascending dose trial showed LGD-6972 had a favorable safety profile Fasting Plasma Glucose Reduction in Type 2 Diabetics Dose-dependent decreases were seen in fasting plasma glucose in both healthy volunteers and Type 2 diabetics (maximal decrease of 60 mg/dl) Decreased glucose was noted in both fasting and post-prandial states (approximate decrease in weighted mean glucose > 50 mg/dl) Ligand advancing program to initiate a Phase 2 trial for LGD-6972 in

27 Major Global Market for Diabetes Drugs $38 B $68 B One of the largest drug categories Market projected to grow to $68 billion by 2022, over 75% increase in 10 years Large opportunity for new treatment mechanism Over the past 5 years there have been 32 licensing deals (pre-clinical to Phase 3) in diabetes with disclosed deal payments of >$11 billion Combination therapy highly prevalent and necessary to optimize management of the disease E 27 Sources: EvaluatePharma June 2014; Global Data: Type 2 Diabetes-Global Drug Forecast & Market Analysis to 2022 and Thomson Reuters Cortellis

28 Top 10 Non-Insulin Diabetes Drugs Current Top Sales Mechanism Drug Company 2014 Sales ($ million) DPP-IV Januvia Merck $3,900 GLP-1 Victoza Novo $2,400 DPP-IV Janumet Merck $2,100 DPP-IV Galvus Novartis $1,200 DPP-IV Onglyza Astra $820 GLP-1 Byetta/ Bydureon Astra $767 SGLT-2 Invokana J&J $552 SGLT-2 Forxiga Astra $138 SGLT-2 Jardiance Eli Lilly/BI $15 GLP-1 Trulicity Eli Lilly $10 TOTAL 2014 SALES $12 B Top 10 - Estimated 2020 Sales Mechanism Drug Company Est Sales ($ million) DPP-IV Januvia Merck $4,190 GLP-1 Victoza Novo $3,445 SGLT-2 Invokana J&J $3,300 DPP-IV Janumet Merck $2,800 DPP-IV Galvus Novartis $1,425 SGLT-2 Forxiga Astra $1,300 GLP-1 Trulicity Eli Lilly $1,100 DPP-IV Onglyza Astra $851 GLP-1 Byetta/ Bydureon Astra $810 SGLT-2 Jardiance Eli Lilly/BI $620 TOTAL Est. PEAK SALES ~$20 B Market projected to grow over 65% to ~$20 billion in products in category projected to have sales greater than $1 billion 28 Source: Thomson Reuters Cortellis sales based on analyst consensus projections, 2015

29 Advantages of Potent GRA Product profile and recent clinical data suggest significant market advantages for a safe, highly potent, oral GRA Existing Class Product Profile GRA Advantage GRA Potentially Competitive with Class Potential GRA Combo with Class DPP-IV Modest reduction of plasma glucose Expected higher glucose reduction GLP-1 Only available as injectables Oral SGLT-2 Contraindicated for renally impaired patients, safety considerations Potentially effective in renally impaired 29

30 Potential Upcoming Events Target Date Program Event Mid 15 Duavive EU product pricing/launch 7/26/15 Kyprolis Multiple Myeloma snda PDUFA date 2H 15 Promacta Pediatric ITP MAA approval 2H 15 Kyprolis Relapsed multiple myeloma MAA approval 2H 15 NS-2 Phase 2 trial initiation 2H 15 Delafloxacin NDA Submission 10/23/15 EVOMELA NDA PDUFA date Q4 15 Promacta Severe Aplastic Anemia MAA approval Q4 15 Carbella NDA approval Q4 15 Topiramate Phase 2 trial initiation Q4 15 IRAK-4 Phase 1 trial initiation 30

31 Cantor Fitzgerald Healthcare Conference July 8, 2015 NASDAQ: LGND